No Single Pharma Model For Commercialization of Biomarkers (View from a Companion Diagnostics Company)

October 12th, 2012

Richard Kennedy

Richard Kennedy of Almac Diagnostics and Queen’s University Belfast, writes that in his experience there is no one route to market for biomarkers in the personalized medicine space. Each pharmaceutical and diagnostic company has its own preferred model and, by focusing on companion diagnostic assays that will be used for the registration of a drug, their approaches can be broadly summarized in three models.

In our experience. there is no one route to market for biomarkers in the personalized medicine space. Each pharmaceutical company and diagnostic company has its own preferred model. If we focus on companion diagnostic assays that will be used for the registration of a drug the various approaches can be broadly summarized in three models:

The pharmaceutical company has already identified a biomarker or in-licensed IP from elsewhere. In this case, the diagnostic company is seen as a service provider and is paid for the various stages of biomarker development and validation in the clinical trial process. In this model the diagnostic company is paid on a work-package and milestone agreement, rather than on a royalty basis.

The diagnostic company has independently developed or in-licensed a biomarker and makes the IP available to a pharmaceutical company for the purpose of drug development. This arrangement typically involves a fee for access to the IP and an agreed royalty on the sale of the biomarker and potentially on drug sales (as these rely on the biomarker). This kind of agreement may also involve some paid service work around biomarker delivery within clinical trials.

The pharmaceutical company and the diagnostic company identify and develop a biomarker as part of a clinical trial. In this model both partners own the IP and agree royalties going forward. As in model 2, this kind of agreement may also involve some paid service work around biomarker delivery within clinical trials. For smaller pharma/biotech companies a risk sharing strategy may be possible, but the diagnostic company will need to be confident in the chance of success for the drug.

Richard Kennedy is the Medical Director/CLIA Diagnostic Laboratory head at Almac Diagnostics and the McClay Professor of Experimental Cancer Medicine at Queen’s University Belfast.

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